Industry and Technology Committee on Nov. 5th, 2025

[The Chair, Liberal, Ben Carr]

Ms. Acan, I'm just going to pop in here for a minute.

You're out of time, but there is one more Liberal question. I'm going go to the Bloc here. Perhaps you and your colleagues can discuss, if we can come back to you, if you'd like to get that question in. Otherwise, we're going to run ourselves over.

Thank you.

Mr. Ste‑Marie, go ahead, please.

[Gabriel Ste-Marie, Bloc, Joliette—Manawan, QC]

Thank you, Mr. Chair.

Ms. Acan, I'm sorry.

I have a question for Mr. Hendriksen and his colleague the city manager, Mr. Van Dine.

In your opinion, what are the most significant technological and industrial gaps in terms of supporting defence operations in the Arctic, including surveillance, logistics and energy infrastructure? What is your take on that as a northerner?

[Ben Hendriksen]

I'll start and then I'll pass it over to Stephen.

First of all, to highlight that, the investments we're looking at now are the biggest investments in more than a generation. That's an extremely positive thing to see. What we need to do is recognize what infrastructures gaps we currently have.

Power, as you just mentioned, is a big one for the Northwest Territories. As you may or may not know in the committee, we're disconnected from the rest of the North American grid, as are Nunavut and the Yukon. That creates real challenges from a community perspective and also from an industrial perspective.

When we talk regularly with our colleagues in the Canadian Armed Forces and the JTFN, it's...as investments come, make sure they're tying into the community needs and having those dual and multi-use needs met. Yellowknifers and northerners are going to want to see the benefits to themselves alongside the military aspect in terms of ensuring that the security and sovereignty is real for all of us.

Power is definitely a big one. In terms of actually moving equipment, that gets down to roads, and roads to smaller communities. Yellowknife has a road. It's a single road in and out. It creates logistics.

For telecoms, we have one fibre line to the city, so it creates concerns around losing that again, as we had threats of in 2023. Other communities lost it in 2023 during the wildfires.

Those are the immediate needs. We're doing well day to day, but any time there's a threat to those key pieces of infrastructure, we don't have the redundancies.

Stephen, I'll pass it over to you for anything you'd like to add.

[The Chair, Liberal, Ben Carr]

I'm going to have to go to the next line of questioning.

Mr. Van Dine, if there is a member who wants to afford you the opportunity to provide that response, they'll certainly be allowed to do so.

[Gabriel Ste-Marie, Bloc, Joliette—Manawan, QC]

Mr. Chair, I would like to thank the witnesses and ask them to send us their answers in writing.

[The Chair, Liberal, Ben Carr]

Absolutely, they can always send their answers in writing to the committee.

Mr. Guglielmin, go ahead.

[Michael Guglielmin, Conservative, Vaughan—Woodbridge, ON]

Thank you, Mr. Chair.

Mr. Leuprecht, you've written in the past how Canada has allowed instruments of statecraft to decay, leaving us unable to act decisively abroad. You've also been quite direct in suggesting that governments have allowed domestic political constituencies to dictate foreign and defence policy choices.

Do you believe this has shaped procurement priorities for our country? What detriment do you think it's had on the Canadian Armed Forces' operational readiness?

[Christian Leuprecht]

I think we make policy backwards in this country. We make a whole bunch of policies and we hope that it somehow adds up to a grand strategy for the country. Other countries have a national security strategy and then they make a bunch of smaller policies to align with that national security strategy.

Ours dates, as you likely know, from 2004. The world has changed significantly, so maybe we can actually establish a common target and then align what we're trying to do. Otherwise, the whole is never going to be greater than the sum of the parts and we're going to live with this fallacy of composition.

[Michael Guglielmin, Conservative, Vaughan—Woodbridge, ON]

You've also previously highlighted how development of infrastructure in our north is critical for national security. Would the establishment of a permanent base in the north strengthen sovereignty and economic presence?

[Christian Leuprecht]

I think, as you just heard from our colleagues in the north, when we talk about defence and security in the south, it means something very different to us than it does when you ask local populations in the north. I think what we heard also is that, in the north, these are communities that are not very resilient. Certainly, as a defence industrial strategy, it behooves us to make sure that we have resilient northern communities that can also withstand both the kinetic threat we are facing in this country now that the north is in play and also the foreign interference threat and the threat to our social fabric that is very active and very real, not just in the south but also in the north.

[Michael Guglielmin, Conservative, Vaughan—Woodbridge, ON]

Thank you.

Ms. Intson, do you feel the current defence industrial strategy does enough to integrate small and medium-sized firms into the procurement supply chains?

[Katheron Intson]

I don't, simply because—

[Michael Guglielmin, Conservative, Vaughan—Woodbridge, ON]

What would you suggest, if asked to elaborate?

[Katheron Intson]

Again, I think this is something.... I apologize for belabouring this point, but we do need to focus less on the integration of small Canadian business and more on the integration of sovereign Canadian IP, and using that as the backbone of all that we do. I hope that makes sense. It doesn't mean that I think small business should be discounted but more that, fundamentally, we need to focus more on building our own sovereign capabilities and strengthening our IP in defence overall.

[Michael Guglielmin, Conservative, Vaughan—Woodbridge, ON]

In your opening remarks, you mentioned Canadian domestic innovation. What lessons do you think we can learn from our allies about rapid acquisition or to help us facilitate rapid acquisition of innovation in this space?

[Katheron Intson]

I would look to the Ukrainian KOROVAI and Brave1 marketplaces as amazing examples of how Ukraine shifted its procurement to allow for rapid prototyping, a changing battlefield and quick procurement. These are the sorts of things we need to move towards.

I want to make something clear. Everyone takes a hard stance that our procurement is ineffective, but the truth is that war changed so quickly with the introduction of UAVs. When this last happened, it was artillery, and it happened over 300 years. FPV drones were introduced 10 years ago, and we have to change procurement very quickly.

I would say that we can borrow lessons from Ukraine. I know that U.S. WARCOM, for example, is also moving its procurement models in a way that basically allows for more rapid iteration, prototyping and procurement of the systems we need on an as-needed basis.

[Michael Guglielmin, Conservative, Vaughan—Woodbridge, ON]

Thank you very much.

Mr. Leuprecht, really quickly, on the political risk aversion that we were discussing a little earlier, how do you think that's negatively impacted..., or do you believe it has contributed to procurement paralysis in some way?

[Christian Leuprecht]

Well, it certainly hasn't helped our defence innovation system. If you look at the Ukrainian military, you'll see that the innovation cycle is now six to eight weeks, whereas our innovation cycle is two years.

We're not going to win with that type of innovation cycle. It requires, as Dr. Intson pointed out, changing the entire structure that underpins the way we think, fund and procure innovation and what it is that we procure. Are we procuring drones, or are we procuring the IP and the algorithms that drive the platforms?

[Michael Guglielmin, Conservative, Vaughan—Woodbridge, ON]

Thank you.

[The Chair, Liberal, Ben Carr]

Ms. Acan, you have five minutes.

[Sima Acan, Liberal, Oakville West, ON]

Thank you very much.

I'll come back to you if I have any time left, Dr. Intson.

Mr. Leuprecht, thank you very much for coming again today. It's good to see you again.

You were mentioning that our defence industry problems are not new. They've been lingering for 20 to 25 years. I want to understand your stance today after seeing the budget yesterday and the budget investments marked for our defence to build “Our North, Strong and Free” and our country's defence industry. What's your take since seeing the budget yesterday and our pledge for defence investments?

[Christian Leuprecht]

As you know, we are not alone. There are many European allies that find themselves in the same boat as we are where the world moved on a lot faster than their willingness to invest in instruments of statecraft, but as allies, we have a collective $20-trillion deficit over the last 35 years relative to investment by the United States. If we believe we need to become more sovereign, as our U.S. allies also want us to be so that we can pick up some of that slack, then it means we will need to make up for some of those deficits and some of those lags that we have had.

I am encouraged by what is being put forward, but I would be much more encouraged if the government would, at least on defence, do what our key allies do—Norway, France and Australia, for instance—and forge a multipartisan defence policy so that, irrespective of who is in charge, we will broadly agree on the trajectory forward. That, I think, also sends a signal to our population and gives us the social licence for the types of investments that governments are looking to make in the sovereignty of this country.

[Sima Acan, Liberal, Oakville West, ON]

Thank you very much, Mr. Leuprecht.

Dr. Intson, as I was saying, Sentinel Research and Development just recently came about a couple of years ago, yet you have already made significant progress in developing scalable platforms with defence applications. Canadian SMEs have experienced barriers in this space, particularly in accessing capital and scaling advanced manufacturing, in the past. With our budget and our plans, we are planning to overcome those obstacles for our industry.

Could you please speak to what enabled your company to move quickly and what lessons or supports you believe are critical for other innovators trying to do the same?

[Katheron Intson]

Without rehashing too many points from my opening address, I would say that it was our number one priority to validate the size of the market. When Canadian entrepreneurs are approaching international investors, particularly VC, VC are looking to make bets on baby billion-dollar businesses—those that have billion-dollar markets although they may not have all of the contracts that make them billion-dollar businesses at that time.

We had to make sure we had a billion-dollar market before we could approach investors, and that's true both within Canada and outside of Canada.

When it comes to the investor piece, and this is true for both government investors and institutional investors, you need to make sure your market is big enough. It was a lot of international business development and a lot of international investor strategy on our part. I think that mostly answers your question.

[Sima Acan, Liberal, Oakville West, ON]

Yes, it does.

What role do the universities or research institutions play in your innovation pipeline or in any other defence innovator's pipeline?